Marching in close step with Uncle Sam: Exploring Scotland’s relationship with the US

THERE are two things Americans love above all about Scotland: its scenery and its heritage. What they respect about Scotland is its education and innovation. With a strong sense of roots, it is little surprise that Americans are No 1 in terms of tourism to Scotland, and today the USA is Scotland’s largest overseas trading partner and inward investor.

Americans are also a major foreign student group, attracted by the international opportunity and lower fees than back home, a considerably cheaper alternative to the Ivy League. US students in Scotland are the second largest overseas group, and most Scottish universities have formal US exchange programmes. Oxford University may have the greatest number of US students in Britain, with 1,280, but Edinburgh University and St Andrews University are not far behind, and in proportional terms St Andrews has the highest representation.

Tourism and education may be hardy perennials of Scottish-American relations, selling the “Scottish experience” and appealing to the romanticism Americans have inherited from their Scottish forebears, but the harder trick is to build business bridges. Recognising this, five years ago this month, in 2006, the Scottish Government launched a Scotland USA strategy. It was a conscious effort to enshrine in policy what had been a long held practice of trying to attract American investment. The USA strategy was launched to strengthen Scotland’s engagement with America, not just culturally but with a business mindset.

The objectives of the strategy were seven-fold (see sidebar), although this was “refreshed” in 2010 and the list reduced to three objectives. First Minister Jack McConnell launched the 2006 strategy before a business audience at the UK Consul in Los Angeles during a US visit. On that occasion, Mr McConnell said: “America matters to Scotland’s future economic prosperity. We have strong historical ties and an ongoing special relationship. I want to make sure that Scotland is getting the most out of this relationship.”

The strategy has essentially involved a mixture of promotional work by the government, technical assistance and branding Scotland in terms of both romance and business reality. The Scottish Affairs Office in Washington DC developed a “Team Scotland” approach, re-branding activities around a Tartan Day held annually on 6 April and a complementary Scotland Week offering a more business focused opportunity to promote the nation.

Such events may seem to some home-based Scots as presenting an unreal tartan and shortbread tin, twee Scotland, but they are vital to achieving success in America. These events are able to capture the imagination of Americans, and New York was positively abuzz during events like Tartan Day and the celebrity-filled Dressed to Kilt. The real objective of Tartan Day, however, is to showcase the significant opportunities in a range of key business sectors, including life sciences, electronics, financial services, textiles, tourism, food and drink, and the energy and renewable sectors.

There has also been a political agenda underpinning the business strategy. Scottish ministers and civil servants have been busy meeting US politicians and lobby groups in the Congress, including the Friends of Scotland Congressional Caucus set up in 2006, the same year as the USA Strategy was launched. It is chaired by Senator Jim Webb, of North Carolina. This bi-partisan group has a membership of some 50 Congressmen, including 30 Senators.

In 2008, US businesses were urged to “Go East” to invest in Scotland by First Minister Alex Salmond, when he gave a speech before a Harvard University audience. In total, recent years have seen Scottish Ministers make some 18 promotional visits to America, including a high profile visit by the First Minister to Washington DC in early 2009 when he met the US Secretary of State, Hillary Clinton. At the sharp end of the USA Strategy is Scottish Development International (SDI), which uses a network of six offices in North America to promote Scottish business and administer the Globalscot network of Scots, which this year marks its tenth anniversary and has strong ties in the life sciences, financial and business services, and technology sectors.

In 2010, SDI undertook a market assessment to identify the scale of the opportunities for Scotland across 12 different food and drink categories such as salmon, dairy, and beer, and then in March of this year announced a series of major contract wins for Scottish food and drink companies in North America. SDI projects combined new sales of almost £20m in the USA over the next three years.

Closer to home, Freescale Semiconductor, the US electronic giant in East Kilbride, announced it had beaten off competition from around the world to establish its new global R&D centre of excellence on the site of the manufacturing plant it shut two years ago. There are also non-governmental groups ploughing the same field, including the Scottish North American Business Council (SNABC), who are hosting an evening reception on Thursday to encourage Scottish companies to “Go West”. As part of the British American Business Council (BABC), SNABC will also next year host the “Transatlantic Conference” in Edinburgh, providing high level networking and information for both sides of the Atlantic. This is the first time it will have been held in Scotland, previous conferences having taken place in San Francisco, London and Washington DC.

In America, local Scottish diaspora groups are key players in the strategy as well, working with business and government to reach out to the Scottish community. Last week saw their Annual Scottish North American Leadership Conference held in Detroit. The diaspora is not just about highland dancing and Brigadoon, as Alan Bain, President Emeritus of the American-Scottish Foundation, notes: “Before the USA Strategy the government never really tapped into the diaspora. Since then, we have been able to contribute to putting Scotland on the map with the Tartan Day and other events, and making these events more commercially focused, not just cultural events.”

In the five years since the strategy was launched, the USA has grown as Scotland’s top export destination, with an estimated £3.3 billion of exports in 2009, an increase of £350m on 2008. America is also the single largest source of inward investment, and as of March 2008 there were 520 USA-owned enterprises in Scotland with an estimated combined employment of 90,000 people, which is 5.5 per cent of the total employed in Scotland. There are 52 companies from the US ranked in the Scottish Business Insider 500. The total turnover from the Scottish operations of these companies is £8.2bn with an average turnover of £159.5m, and just over half of business research and development expenditure in Scotland can be traced back to American business.

Could the numbers be better? In the best traditions of the best laid plans, given the global downturn it is difficult to truly measure the success of the Scotland USA strategy five years on. In terms of the “refreshed” strategic objectives of bringing a sharper economic growth focus to the promotion of Scotland, alongside managing Scotland’s reputation as a distinctive global identity, the government has not done too badly. However, as for the objective of creating “the conditions for people to live, learn, visit, work, and invest in Scotland,” well that belongs to a much broader base of Scottish interests, and the weather!

• David Cowan is completing a PhD on the religious Right and American foreign policy at the University of St Andrews.